Occasional Papers

A Survey of the Evidence on Over-Indebtedness

October 7, 2011

This paper is written primarily for microlenders and the institutions that fund them. We examine conceptual issues and the limited empirical evidence about over-indebtedness in microcredit markets.

Is There a Business Case for Small Savers?

September 16, 2010

This study examines quantitatively whether or not small savers contribute to or undermine the sustainability of the MFI.

Microfinance Foreign Exchange Facilities

May 6, 2010

Foreign capital investment in microfinance has been booming over the past four years. It can bring important benefits to MFIs, but it also comes with foreign exchange risk.

All Eyes on Asset Quality

March 1, 2010

The upheaval that hit mainstream financial markets and the reverberations that continue to be felt across the globe from the resulting economic crisis impacted MFIs and their clients.

Are the Poor Being Exploited by High Microcredit Interest Rates?

February 25, 2009

The problem is that administrative costs are inevitably higher for tiny microlending than for normal bank lending.

Shedding Light on Microfinance Equity Valuation

February 3, 2009

The report's objective is to provide benchmarks for valuation of microfinance equity, both private and publicly listed.

Transforming NGO MFIs

June 1, 2008

This publication provides insights and guidance for nonprofit microfinance institutions that plan to transform into a for-profit company. Thus the paper’s discussion of issues is likely more detailed and technical than most general readers will care to wade through. At the same time, this is not a “how to” manual nor does it identify right and wrong answers.

Sustainability of Self-Help Groups in India

April 1, 2007

This Occasional Paper reports on two separate studies of SHG programs. Part I looks primarily at the financial viability of SHG programs. Part II proposes a methodology for designing SHG programs to ensure their sustainability.

Managing Risks and Designing Products for Agricultural Microfinance

April 1, 2005

This Occasional Paper offers a model for providing financial services to poor, rural farming households that combines the most relevant and promising features of traditional microfinance, traditional agricultural finance, and other approaches.

Crafting a Money Transfers Strategy

March 1, 2005

This Occasional Paper explores operational and strategic considerations involved in launching a money transfer product. Financial service providers that cater to the poor have been drawn to the money transfer market because it offers them the opportunity to fulfill their financial goals as well as their social objectives.

Interest Rate Ceilings and Microfinance

September 1, 2004

This Occasional Paper outlines the rationale for higher microcredit interest rates, the historical performance of subsidized lending, and the impact of interest rate ceilings on microfinance clients. It includes recommendations for fostering lower microcredit interest rates through competition and consumer protection without imposing interest rate ceilings.

Financial Institutions with a Double Bottom Line

July 1, 2004

This Occasional Paper summarizes the results of CGAP's survey of the global outreach of a broad set of institutions that extend financial services downward -- institutions with a "double bottom line" of financial and social/development objectives. The survey found that over 750 million accounts exist below the traditional level of commercial banks and that a substantial fraction of these predominantly savings accounts probably belong to the poor or near poor -- and represent an important opportunity for outreach.

Scoring

January 1, 2003

Scoring is a way to judge the risk of whether the self-employed poor will repay their microcredit debts as promised This Occasional Paper discusses how scoring works, what microlenders can expect from it, how to use it, and what its implications are for microcredit.

Microcredit Interest Rates

November 1, 2002

This Occasional Paper explains how a microfinance institution (MFI) should estimate the interest rate on its loans if the institution wants to become sustainable; how to calculate the effective interest yield on loans; and what different loan and repayment methods are used to determine the true rate of interest income received by an MFI. This Occasional Paper also discusses evidence that MFI clients are capable of paying high interest rates, concluding that MFIs should be able to cover their costs.

Apex Institutions in Microfinance

January 1, 2002

The Occasional Paper reviews the experience of national microfinance apexes -- wholesale mechanisms that channel funds, with or without supporting technical services, to retail microfinance institutions in a single country or integrated market.

Commercialization and Mission Drift

January 1, 2001

This Occasional Paper examines the impact of commercialization and increased competition on the strategy and performance of microfinance institutions in Latin America, with particular focus on "mission drift"-- whether or not commercialization drives MFIs to deviate from their original missions.

The Rush to Regulate

April 1, 2000

This Occasional Paper discusses a wide range of issues concerning regulation of microfinance and presents a range of alternative mechanisms for supervision.

Measuring Microcredit Delinquency

June 1, 1999

This Occasional Paper addresses issues surrounding measuring microcredit delinquency rates. Not only can poor ratios mislead donors, they can also obscure urgent problems from microfinance institution managers until it is too late to reverse them.

Cost Allocation for Multi-Service Microfinance Institutions

April 1, 1998

Using examples from the field and an actual microfinance institution (MFI) -- BRAC -- this Occasional Paper explores alternative answers to a series of questions that MFI managers should ask themselves regarding the allocation of costs and assets among cost centers and the impact of cost allocation on the financial statements of multiservice MFIs.